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Tax information reporting

Ensuring accurate reporting to clients and tax authorities

The fight against tax evasion by the world's governments, who are pushing for greater tax transparency, led to the introduction of automatic exchange of customer information by financial institutions to tax authorities.

Companies need to be able to interrogate, consolidate and transmit huge amounts of sensitive data quickly, easily and in a secure and auditable form to tax authorities and customers. They want tax articulate reports so that they can complete tax returns easily and accurately.

PwC continues to make significant investment in technology to help financial services firms meet these significant new challenges. For more information, please watch this short animation.

Automatic Exchange of Information (AEoI) in 2018

The World's governments push for greater tax transparency led to the introduction of automatic exchange of information (AEoI) by Financial Institutions (FIs) to tax authorities. The Foreign Account Tax Compliance Act (FATCA), generally requires that FIs and certain other non-financial entities outside of the US report on the assets held by their US account holders. The Common Reporting Standard (CRS), developed by the OECD calls on FIs to report assets held by account holders resident within a reportable list of participating jurisdictions. The reportable list of jurisdictions is dependent on the jurisdiction that the FI operates in.

2018 sees a further expansion of the number of jurisdictions participating in the Common Reporting Standard (CRS). More than fifty additional jurisdictions implemented CRS in 2017 with the first reporting due this year. The key jurisdictions this year are Canada; Australia; New Zealand, Hong Kong, China, Switzerland, Japan and Singapore.

The impact is two fold:

If companies have account holders that are tax resident in these new jurisdictions you may need to include them in your reporting population this year; and

Companies will need to consider whether any legal entities in your structure in these jurisdictions have met their obligations under the CRS rules as implemented in each jurisdiction.

Unfortunately, there is little alignment between jurisdictions. Some will require a nil return to be made. Others, such as Cayman Islands, will require companies to register all FIs they have in that jurisdiction. Of course, the statutory filing dates are all different. Not correctly reporting or failing to meet other obligations can result in significant monetary fines. For example, Luxembourg levy fines of €250,000 for failing to file a return. Moreover, both the UK and Ireland tax authorities intend to undertake compliance checks in 2018 to ensure their FIs are complying with FATCA and CRS.

PwC AEoI Reporting

PwC AEoI Reporting draws on the PwC’s global tax expertise and a network which includes a presence in 157 countries. Last year they helped more than 1,000 FIs report on more than 350,000 accounts in over 30 jurisdictions. This year they will be handling submissions to over 50 authorities globally. The team offers a technology platform that enables companies to interrogate, consolidate and transmit large amounts of sensitive data quickly, easily and in a secure and auditable form to tax authorities and customers. It can:

Consume client data through multiple integration/delivery methods

Validate and aggregate data to prevent delays or submission failures

Provide clear management reports

File in over 50 jurisdictions

With a PwC presence in 157 jurisdictions others juridictions can be added on request